Question

eptune Accounting Services expects its accountants to work for 24 comma 000 direct labor hours per year. The​ company's estimated total indirect costs are $ 222 comma 000. The direct labor rate is $ 75 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Neptune performs a job requiring 30 hours of direct​ labor, what is the total job​ cost? (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest​ dollar.)

Answer 1

$2,527.5

Step-by-step explanation:

Indirect labor hours:

= Estimated total indirect costs ÷ Direct labor hours per year

= $222,000 ÷ 24,000

= $9.25

Total job​ cost:

= Direct labor cost + Indirect labor cost

= (direct labor rate per hour × Number of direct labor hours) + (Number of direct labor hours × Indirect labor rate per hour)

= ($75 × 30) + (30 × $9.25)

= $2,250 + $277.5

= $2,527.5